Rheinmetall’s consolidated sales rose by a significant 36% in 2024
Boosted by 50% rise in defence business
Rheinmetall, the Düsseldorf-based global leader in defence and technology, posted significant growth across its divisions and record sales and operating results for fiscal year 2024.
The company’s consolidated sales surged by 36%, reaching €9.75 billion, driven primarily by a 50% increase in its defence business, which now accounts for the lion’s share of its operations.
The operating result also saw a 61% climb to a record €1.48 billion, up from €918 million in 2023. This growth pushed the group’s operating margin to 15.2%, with the defence segment achieving an even higher margin of 19%.
Rheinmetall’s order backlog also reached an all-time high of €55 billion, representing a 44% increase compared to the €38.3 billion recorded in 2023. This backlog reflects the substantial demand for Rheinmetall’s products from military customers, which is expected to ensure substantial capacity utilisation for years.
The company has proposed a dividend of €8.10 per share, up from €5.70 in the previous year. This demonstrates the company’s robust financial health and commitment to delivering shareholder value.
The growth trajectory is expected to continue into fiscal year 2025, with Rheinmetall forecasting sales to rise by 25% to 30%, alongside an operating margin of around 15.5%. The company is well-positioned to capitalise on the current geopolitical climate and increasing demand for defence technology and capabilities.
Rheinmetall CEO Armin Papperger highlighted the company’s significant investments over the past two years, which total €8 billion, to expand its capacity, acquire new assets, and secure critical supply chains.
“Zeitenwende 2.0”
Papperger emphasised the company’s readiness for what he described as “Zeitenwende 2.0,” a new era of rearmament in Europe, which presents challenges and unparalleled growth opportunities for Rheinmetall.
“With a 50% sales growth in the defence business, Rheinmetall is on its way from being a European systems supplier to a global champion,” he said. He also noted the company’s crucial role in enhancing Europe’s defence capabilities, with future growth prospects driven by the military equipment needs.
The fiscal year 2024 was marked by significant growth in Rheinmetall’s defence technology divisions, with notable results in the vehicle systems, weapons and ammunition, and electronic solutions sectors.
Rheinmetall’s vehicle systems division, which focuses on wheeled and tracked military vehicles, saw a 45% rise in sales, totalling €3.79 billion. This was due to substantial orders for military trucks and tactical vehicles. The division’s operating result also increased by €100 million to €425 million, although the operating margin declined slightly to 11.2% due to a shift in the product mix.
The company’s weapon and ammunition division posted the most notable growth, with sales climbing by 58% to €2.78 billion, primarily driven by increasing demand from Germany, NATO countries, and Ukraine. The division’s operating result nearly doubled, rising by 96% to €790 million, as the company secured significant, multi-year framework agreements, including a €7.1 billion increase in artillery ammunition orders from Germany.
The company’s electronic solutions division, specialising in defence electronics, generated sales of €1.73 billion, up 31% from the previous year. The division’s order intake also set a new record, more than doubling to €5.07 billion, driven by significant air defence contracts. The division’s operating result grew by 45%, reaching €217 million, while the operating margin improved to 12.6%.
Despite the impressive results in defence, the company’s civilian business, now organised under a new power systems division, showed mixed performance. Sales in power systems declined by 2%, driven by market weakness in various product areas, including air management and exhaust gas regulation.
However, the firm’s trade business unit achieved the highest sales in the company’s history, posting a 14% increase to €68 million. The division’s operating result also fell to €86 million, down from €133 million in 2023, reflecting the more challenging market conditions.
Hero image: Rheinmetall recently received an order from the German armed forces to establish an integrated communication network, the so-called ‘Tactical Wide Area Network for Land Based Operations’. Credit: Rheinmetall
Last Updated on 17 hours by Arnold Pinto
